Tuesday, November 8, 2011

A prominent economic thinker who has a particular knack for communicating with the uninitiated, who speaks truth to power, has an excellent grasp of economic logic and principles, and aggressively stands up for a liberal society?

Henderson will crown who Henderson will crown, and it won't be Paul Krugman. But then, to me, it won't really be a "modern Bastiat". It will be a "best communicator of libertarianism" prize, despite the objection that that's not what's going on.

OK - let the weeping and gnashing of teeth begin. People are already aghast at what seems to me to be a fairly obvious suggestion from Karl Smith.

I probably should add that if one were to ask this question in the 1920s and 1930s the obvious answer would be Keynes.

UPDATE: Here's an example of one objection from Don Boudreaux, who is one of the last people you should ever read if you want to understand anything that Krugman says, or anything about Keynesianism in general: "Yes, like Bastiat, Krugman is passionate in pressing his position. But Bastiat was above all a (classical) liberal - and one ever-attuned to the unseen. Krugman fails magnificently on both counts. Moreover, unlike Bastiat, Krugman spends far too much effort fronting for a particular political party." I wouldn't be so blunt about Don if he wasn't so nasty about Krugman here.

I've found that most fans of Bastiat's often misunderstand and regularly misapply the broken window fallacy - I've gone over that point a lot here, and I don't think my argument on that should be news to anyone. I also think it's obvious that "modern liberals" are classical liberals and that while libertarianism falls under "classical liberalism" too, that is not the definition of the term as Don would have you think. Modern libertarians would not have done well with classical liberals like Jefferson, Paine, and Smith.

33 comments:

Just a quick example of why krugman does not deserve to be labelled a modern bastiat.

Krugman's column "Panic of the plutocrats"( http://www.nytimes.com/2011/10/10/opinion/panic-of-the-plutocrats.html?ref=paulkrugman&gwh=B38BC9B54AB9ACD4901D434611E7F5C0 ) from october of this year. An excerpt

"Consider first how Republican politicians have portrayed the modest-sized if growing demonstrations, which have involved some confrontations with the police — confrontations that seem to have involved a lot of police overreaction — but nothing one could call a riot. And there has in fact been nothing so far to match the behavior of Tea Party crowds in the summer of 2009.

Nonetheless, Eric Cantor, the House majority leader, has denounced “mobs” and “the pitting of Americans against Americans.” The G.O.P. presidential candidates have weighed in, with Mitt Romney accusing the protesters of waging “class warfare,” while Herman Cain calls them “anti-American.” My favorite, however, is Senator Rand Paul, who for some reason worries that the protesters will start seizing iPads, because they believe rich people don’t deserve to have them."

Krugman's column "the town hall mob" ( http://www.nytimes.com/2009/08/07/opinion/07krugman.html ) from august of 2009. An excerpt

"That is, the driving force behind the town hall mobs is probably the same cultural and racial anxiety that’s behind the “birther” movement, which denies Mr. Obama’s citizenship. Senator Dick Durbin has suggested that the birthers and the health care protesters are one and the same; we don’t know how many of the protesters are birthers, but it wouldn’t be surprising if it’s a substantial fraction."

A modern Bastiat (if you're trying to be analogous in any useful way) would be a politician; Bastiat was a politician for most of his short period of prominence after all. Bastiat also physically participated in the events that went on around him - he went down to the barricades in other words.

It becomes less obvious why a professional economist would be a modern day Bastiat when Bastiat was anything but that; Bastiat was a very well read person who burst upon the Parisian scene via publication; he came out of nowhere in that way and he quickly turned his eye to practical politics afterwards (until his unfortunate and early death just a few years later).

Neither Keynes nor Krugman are really anything like Bastiat; nor is anyone else for that matter. To be analogous a modern Bastiat would have to have spent most of his or her life in the active social, political and intellectual life of say some rural area of the America West, he or she would have to then write a work which takes much of the U.S. by storm, and then run for political office and take a seat in the U.S. Congress all the while continuing to use their pen to pursue their view of the world. In short, there is no modern Bastiat, and that ought to be obvious.

That's even assuming that Bastiat would be an American. Anyway, very rarely do exercises like this do anything more than butcher history (and that makes a lot of assumptions about history obviously). Better to quote Shakespeare instead:

"He was a man, take him for all in all,I shall not look upon his like again."

Bastiat's 'fallacy' is nothing but an abstract little story where he assumes a few things:

(a) The money spent on fixing a broken window would have been spent otherwise.

(b) The broken window was not replaced by a better window.

(c) The broken window was not used as an opportunity by the shopkeeper to, say, revamp his store.

No libertarians, I am not suggesting we go around breaking windows. But AFTER THE FACT a broken window can become a rationalisation for replacing old capital with new capital. Don't think you can cite a silly little story by a right wing nutter as a blanket objection to, well, everything.

Modern day Austrians also like him because his tone is like theirs: rude, condescending, smug, arrogant, etc.

I'd say modern day Austrians like him because you can some precursors to "Austrian thought" in his writings.

Anyway, nutter or not, Bastiat was not part of the "right wing." Look at his ouevre; during his own time he was difficult for people to pin down (which infuriated many), and he would not fit very easily into any dominant political ideology today. Indeed, given his relationship with Molinari, you could argue that anarcho-capitalists have him as part of their legacy - but so could any number of other points of view.

1) Bastiat was also a politician, not just an economist. His concern was not merely theory, but also understanding that political realities also set limits on what can be done and how one must work within them.

While Paul Krugman once said that if a solution is not politically feasible, then you may as well say there is no solution at all, Bastiat would have been forced to find such a solution somehow because of the nature of his job.

2) Paul Krugman is just a little less cosmopolitan than Bastiat was. Both Krugman and Bastiat are very pro-globalization, compared to ultra-nationalists of our times.

However, Krugman's unfortunate blaming of the Chinese for aggravating recession in America indicates a macroeconomic tunnel vision, through which imports are considered bad because they make no positive difference on full employment. On the other hand, Bastiat and other free traders see imports not from the perspective of employment or aggregate demand but from the fact that they are a helpful means of getting what you want without producing it yourself.

I think you're giving yourself too much credit. Just because you think people misapply Bastiat's broken window fallacy doesn't mean that they've actually misapplied the fallacy. It could very well mean that you simply misunderstand it.

I'm not saying this is the case, but you write your blog post as if this is old news and you're surprised nobody has taken it into consideration. I wouldn't be so surprised.

I don't think of Bastiat as being an economist; he was an auto-didact who soaked himself in a broad range of intellectual pursuits. That's partly why he is constantly dropping allusions to a broad range of literary, etc. works - from Virgil to More to Terence to Racine (obviously he is also dropping allusions to various "economists" who preceded him as well). Bastiat always shows a massive range of learning in his works; he was self-educated in a very liberal manner at it shows in his writing.

I've found that most fans of Bastiat's often misunderstand and regularly misapply the broken window fallacy - I've gone over that point a lot here.

Yes, Daniel_Kuehn, and if I recall correctly, the last time you lectured us rubes about "broken windows only applies during crowding out", you ended up having to redo your own analysis and retract several statements you made about such supposed "misapplications". Do I need to get the links?

Eventually, I remember you agreeing that society is not better off, as judged from the standpoint before a natural disaster, when one hits, but that it's better to rebuild, given a disaster. Which, of course, no one disputed all along.

I agree with Jonathan_M.F._Catalan: you don't understand the fallacy yourself.

You seem to be interested in reproducing Bastiat's entire biography. As you point out, no one will fit that bill. But who is talking about anything like that?

Most people I think interpreted Henderson to mean "who is the modern person who is outspoken and excels at educating the public about good economic thinking using the written word, and promotes a better society in opposition to a political status quo". The obvious answer to that today is "Paul Krugman". In recent decades we could add Friedman too.

Other seem to have interpreted Henderson as asking "Who is today's eloquent popularizer of libertarianism".

Nobody except you seems to have read him as reproducing Bastiat's entire biography.

Yes, I'm interested in Bastiat for who he was; that probably is a "strange" way to look at it.

It isn't an issue of interpretation; I'm not interested in the way the question was framed to start with. It is the sort of question in fact where you are going to get a bunch of predictable answers in a very predictable way. Boring.

Keynes doesn't fit that biography at all; for example, Keynes came from a well to do family which was prominent in the UK before he became prominent. Bastiat doesn't come from anything like that background; he was an orphan; he dropped out of school in order to work in the family business in his teens; he did have the good fortune to inherit from his grandfather in his twenties enough money to make him financially secure; etc. Bastiat never went to anything like Cambridge, he was a provincial most of his life (until 1844), and he came upon his vast erudition in a self-taught manner and through his conversations with a local group of mostly men who he held regular meetings with. They did both write works that made them prominent in a splashy way initially, but they have vastly different biographies.

I didn't say he was looking for a Bastiat doppelganger. I'm saying that it is a pointless and silly question which leads nowhere (this is the third time I've made this point in one way or another in this dialogue). So I adopt a different approach entirely to the issue that Henderson does not in anyway intimate, nor do I suggest he does. Now that we've settled that hopefully...

I'm fairly certain that one could cherry pick parallels between Bastiat and lots of folks in the commentariat, etc. these days; I would most likely find them all equally unconvincing (that includes the effort to compare Ron Paul to Bastiat - of which there are many possible paralells and which people often do). I'd rather deal with the real Bastiat as much as that is possible, it is (to me at least) a much interesting question than trying to marry him up with some figure of current prominence.

"Don Boudreaux, who is one of the last people you should ever read if you want to understand anything that Krugman says"

If I want to understand PK, I simply read PK. If I want to understand DB, I read DB. If I want to know what DB thinks about PK, I read DB.

DB, or me, or you, or PK, have no special powers to truly understand what anyone really means beyond what they write.

PK frequently makes comments like "he was pretending to be stupid" (referring to Greg Mankiw), or "he reveals more than he intended" (referring to Russ Roberts), or "he probably does not believe this himself" (don't remember to whom he was referring). PK, despite his formidable intellect, cannot possibly know things about a person other than what that person wrote.

My point here is, if you want to read a counter point to PK, by all means read DB. If you want to stand in a echo chamber, never leave the PK blog or its comments, or cafehayek.

If you want to test your current personal bias set read both DB and PK, and read what they think about each other.

Charles Rice -I think you go a little too far - interpretation can be extremely valuable. If we were to take the reasonable parts of your argument as literally as you seem to want to, then it doesn't even help to read "what they write" because comprehension can't possibly come along with my reading. I think it's best to say that interpretation is valuable but never perfect.

To that I would add - some interpretation is more valuable than others. I've been following Don for years now - he's not a particularly good interpreter of Krugman. It has nothing to do with the fact that they disagree with each other. Bob Murphy disagrees with him and he's an example of someone who does quite well interpreting Krugman (Bob's downside is that he has a penchant for trying to find contradictions everywhere in Krugman - usually contingent on some vague phrasing or on some fairly reasonable assumption that's just left unstated... any post of Bob's that's not billed as a "Krugman Kontradiction" is usually quite a thoughtful piece).

Look, I don't go to Krugman for a good critique of any Austrian. He's a bad critical interpreter of Austrians. That's not the same as saying that we can't get value from interpreters of Austrian economics (or from interpreters of Krugman).

re: "Whether that is true or not is unimportant if you are interested in what DB has to say or has to say about PK."

Clearly. I still follow DB because I have an interest in what he thinks about PK (and Keynesianism generally), because I think he spreads a lot of confusion on the matter and I find it worth addressing it because he has such a wide readership. "If I can change one mind..." yadda yadda yadda.

What I said is true. But since I don't go to Don for good interpretations of Krugman, as you say it doesn't matter much.

Some people do go to Don for good interpretations of Krugman, and that is the major concern here (for me at least - if you don't find it to be a concern of course that's your own business).

Both PK and DB have said some excessively stupid things in my limited experience with their blogs (the one that always comes to mind with PK is his comments on the shooting in Arizona); I too say excessively stupid things from time to time, but I have to live with that and it normally provides me some benefit in the long run (I get corrected and I learn something).

I'm not young enough anymore to be concerned with changing someone's mind; plus I don't really think it works that way anyway, and I'm congenitally anti-evangelical.

"Anyway, very rarely do exercises like this do anything more than butcher history (and that makes a lot of assumptions about history obviously)."

I agree.

Silas,

I'm certainly no expert on the broken window fallacy or any of Bastiat's writings, but given that you wrote "I agree with Jonathan_M.F._Catalan: you don't understand the fallacy yourself." I'm already skeptical as to why I'd trust your interpretation of it!

Fair enough. As I said I have no dog in that fight and I certainly don't doubt your own belief that you are correct. I was merely pointing out that Jonathan's post in this thread didn't say what you said it did. Perhaps he's said it elsewhere?

Also you might want to consider just posting the evidence that Daniel's interpretation has been incorrect in the past. I don't see why he would object! Why withhold it in the first place?

Mark,

"(a) The money spent on fixing a broken window would have been spent otherwise.

(b) The broken window was not replaced by a better window.

(c) The broken window was not used as an opportunity by the shopkeeper to, say, revamp his store."

Mark, Are you trying to say Daniel argues that wealth was created from breaking the window?

re: "Let me know where you live, and when you'd like to have all your windows broken. I love smashing things."